Entry Into Exclusive Negotiations Between Keysight and ESI Group’s Main Shareholders to Acquire a Controlling Block Followed by the Launching of a Mandatory Cash Tender Offer - Seite 2

In today’s era of digital transformation, product development across many industries is shifting left in the design cycle and becoming virtualized. Computer-aided engineering supports this shift left with virtual prototyping of products, manufacturing processes, and workflows.

By bringing ESI Group into its electronic design and test portfolio, Keysight will further expand its software prototyping capabilities into computer-aided engineering, enabling customers to accelerate time to market and lower operational costs, while reducing their environmental footprint.

About the proposed transaction

In the context of a competitive sale process, Keysight has entered into exclusive negotiations with certain shareholders² of ESI Group representing in aggregate 50.6%¹ of ESI Group's share capital and 55.8%¹ of its theoretical voting rights (the "Sellers"), with a view for Keysight to acquire the entire shareholding of the Sellers (the "Controlling Block").

These exclusive negotiations result in particular from a put option (the "Option") granted under customary conditions by Keysight to the Sellers. Under the terms of the Option, the Sellers benefit from an option that they may decide to exercise following the information and consultation procedure of ESI Group's social and economic committee (the "CSE"), which will be initiated as soon as possible.

The signature of definitive agreements can only take place once such CSE information and consultation procedure has been completed. Completion of the acquisition of the Controlling Block is also subject to obtaining certain regulatory approvals.

Subject to the completion of the acquisition of the Controlling Block by Keysight, Keysight will file with the Autorité des Marchés Financiers (the "AMF") a mandatory tender offer for all remaining outstanding ESI Group shares, on the same financial terms as the acquisition of the Controlling Block (i.e., 155 euros per share in cash) (the "Offer"). The Offer price values 100% of ESI Group's entire share capital issued and to be issued under stock options and free share plans at approximately 913 million euros on a fully diluted basis.

The Offer price of 155 euros per share represents a premium of approximately:

• 72% to the closing price of 90.0 euros per share on the Leak Announcement Date; and
• 95% to the volume weighted average price of 79.4 euros per share for the three months up to the Leak Announcement Date.

Completion of the tender offer is subject to the AMF's declaration of conformity (déclaration de conformité). In the event that the 90% threshold in share capital and voting rights are crossed at the end of the Offer, Keysight will request the implementation of a squeeze-out procedure for ESI Group.